VILNIUS — Lithuanian retailers could face heavy fines under a new law aiming to protect suppliers and producers in a country where large businesses have very strong bargaining power against smaller businesses.

The new law will target the supermarket sector, which is dominated by large companies such as Maxima, itself a piece of the V.P. Grupė business empire. Farmers, suppliers and producers are often squeezed into deals that are hard to make profitable because of the supermarkets’ bargaining power. The law’s implementation signals a [private_supervisor]victory for President Dalia Grybauskaitė, who campaigned on combating so-called monopolies in Lithuania.

From April 1 the law will restrict retail chains from forcing certain fees upon suppliers, with penalties of higher taxes and stiff fines to give it teeth.

No longer will retailers be able to charge “entrance” fees to join the market, or pay arrangement fees or demand cheaper prices in case the product doesn’t sell.

To enforce the law, the Competition Council will have the ability to levy a 400,000 litai (€115,000) maximum fine against companies found in breach of the law.

Previously retailers were charging fees to suppliers relating to the opening and maintenance of new stores, requiring them to undercut competition. Under the new law, retailers will have to inform suppliers at least 10 days in advance if they want to change the conditions of their contractual agreements.

Traders will still be able to return unsold goods and food to suppliers, but only if they are valid for not less than one third of the shelf-life. Retailers also will not be able to require suppliers to pay the costs of promotion, unless it is stated in a written agreement. Suppliers will not be liable to pay reimbursement costs incurred in resolving consumer complaints, unless the complaint was caused by the supplier or its product.

When the law was first proposed in 2009, chairman of the board of Norfa supermarkets Dainius Dundulis, told Verslo Žinios that the law would only serve to marginalize local producers further and push them out completely.

Prisma, the newest supermarket brand in the sector said it was constantly surprised by suppliers who asked about the fees, which the Finnish company had never heard of previously.

“Current Prisma suppliers and other manufacturers and wholesalers, with which we have had to communicate have repeatedly asked about the so-called input, shelf fees and miscellaneous compensation. About these matters, we are still surprised,” Anu Huuska, general director of Prisma Lithuania told the press.

Huuska said the law would benefit local producers. [/private_supervisor] [private_subscription 1 month]victory for President Dalia Grybauskaitė, who campaigned on combating so-called monopolies in Lithuania.

From April 1 the law will restrict retail chains from forcing certain fees upon suppliers, with penalties of higher taxes and stiff fines to give it teeth.

No longer will retailers be able to charge “entrance” fees to join the market, or pay arrangement fees or demand cheaper prices in case the product doesn’t sell.

To enforce the law, the Competition Council will have the ability to levy a 400,000 litai (€115,000) maximum fine against companies found in breach of the law.

Previously retailers were charging fees to suppliers relating to the opening and maintenance of new stores, requiring them to undercut competition. Under the new law, retailers will have to inform suppliers at least 10 days in advance if they want to change the conditions of their contractual agreements.

Traders will still be able to return unsold goods and food to suppliers, but only if they are valid for not less than one third of the shelf-life. Retailers also will not be able to require suppliers to pay the costs of promotion, unless it is stated in a written agreement. Suppliers will not be liable to pay reimbursement costs incurred in resolving consumer complaints, unless the complaint was caused by the supplier or its product.

When the law was first proposed in 2009, chairman of the board of Norfa supermarkets Dainius Dundulis, told Verslo Žinios that the law would only serve to marginalize local producers further and push them out completely.

Prisma, the newest supermarket brand in the sector said it was constantly surprised by suppliers who asked about the fees, which the Finnish company had never heard of previously.

“Current Prisma suppliers and other manufacturers and wholesalers, with which we have had to communicate have repeatedly asked about the so-called input, shelf fees and miscellaneous compensation. About these matters, we are still surprised,” Anu Huuska, general director of Prisma Lithuania told the press.

Huuska said the law would benefit local producers. [/private_subscription 1 month] [private_subscription 4 months]victory for President Dalia Grybauskaitė, who campaigned on combating so-called monopolies in Lithuania.

From April 1 the law will restrict retail chains from forcing certain fees upon suppliers, with penalties of higher taxes and stiff fines to give it teeth.

No longer will retailers be able to charge “entrance” fees to join the market, or pay arrangement fees or demand cheaper prices in case the product doesn’t sell.

To enforce the law, the Competition Council will have the ability to levy a 400,000 litai (€115,000) maximum fine against companies found in breach of the law.

Previously retailers were charging fees to suppliers relating to the opening and maintenance of new stores, requiring them to undercut competition. Under the new law, retailers will have to inform suppliers at least 10 days in advance if they want to change the conditions of their contractual agreements.

Traders will still be able to return unsold goods and food to suppliers, but only if they are valid for not less than one third of the shelf-life. Retailers also will not be able to require suppliers to pay the costs of promotion, unless it is stated in a written agreement. Suppliers will not be liable to pay reimbursement costs incurred in resolving consumer complaints, unless the complaint was caused by the supplier or its product.

When the law was first proposed in 2009, chairman of the board of Norfa supermarkets Dainius Dundulis, told Verslo Žinios that the law would only serve to marginalize local producers further and push them out completely.

Prisma, the newest supermarket brand in the sector said it was constantly surprised by suppliers who asked about the fees, which the Finnish company had never heard of previously.

“Current Prisma suppliers and other manufacturers and wholesalers, with which we have had to communicate have repeatedly asked about the so-called input, shelf fees and miscellaneous compensation. About these matters, we are still surprised,” Anu Huuska, general director of Prisma Lithuania told the press.

Huuska said the law would benefit local producers. [/private_subscription 4 months] [private_subscription 1 year]victory for President Dalia Grybauskaitė, who campaigned on combating so-called monopolies in Lithuania.

From April 1 the law will restrict retail chains from forcing certain fees upon suppliers, with penalties of higher taxes and stiff fines to give it teeth.

No longer will retailers be able to charge “entrance” fees to join the market, or pay arrangement fees or demand cheaper prices in case the product doesn’t sell.

To enforce the law, the Competition Council will have the ability to levy a 400,000 litai (€115,000) maximum fine against companies found in breach of the law.

Previously retailers were charging fees to suppliers relating to the opening and maintenance of new stores, requiring them to undercut competition. Under the new law, retailers will have to inform suppliers at least 10 days in advance if they want to change the conditions of their contractual agreements.

Traders will still be able to return unsold goods and food to suppliers, but only if they are valid for not less than one third of the shelf-life. Retailers also will not be able to require suppliers to pay the costs of promotion, unless it is stated in a written agreement. Suppliers will not be liable to pay reimbursement costs incurred in resolving consumer complaints, unless the complaint was caused by the supplier or its product.

When the law was first proposed in 2009, chairman of the board of Norfa supermarkets Dainius Dundulis, told Verslo Žinios that the law would only serve to marginalize local producers further and push them out completely.

Prisma, the newest supermarket brand in the sector said it was constantly surprised by suppliers who asked about the fees, which the Finnish company had never heard of previously.

“Current Prisma suppliers and other manufacturers and wholesalers, with which we have had to communicate have repeatedly asked about the so-called input, shelf fees and miscellaneous compensation. About these matters, we are still surprised,” Anu Huuska, general director of Prisma Lithuania told the press.

Huuska said the law would benefit local producers. [/private_subscription 1 year]

— This is a paid article. To subscribe or extend your subscription, click here.